| Topic: |
Politics > Politics-USA |
| User: |
"" |
| Date: |
28 Jun 2007 05:41:54 PM |
| Object: |
Warren E. Buffett questions fairness of U.S. tax system |
source: http://www.truthdig.com/eartotheground/item/20070627_buffett_questions_tax_gaps/
Warren E. Buffett was his usual folksy self Tuesday night at a
fundraiser for Sen. Hillary Rodham Clinton (D-N.Y.) as he slammed a
system that allows the very rich to pay taxes at a lower rate than the
middle class.
Buffett cited himself, the third-richest person in the world, as an
example. Last year, Buffett said, he was taxed at 17.7 percent on his
taxable income of more than $46 million. His receptionist was taxed at
about 30 percent.
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| User: "Beal" |
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| Title: Re: Warren E. Buffett questions fairness of U.S. tax system |
28 Jun 2007 06:13:01 PM |
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On Jun 28, 4:41 pm, "simple_langu...@yahoo.com"
<simple_langu...@yahoo.com> wrote:
source:http://www.truthdig.com/eartotheground/item/20070627_buffett_question...
Warren E. Buffett was his usual folksy self Tuesday night at a
fundraiser for Sen. Hillary Rodham Clinton (D-N.Y.) as he slammed a
system that allows the very rich to pay taxes at a lower rate than the
middle class.
Buffett cited himself, the third-richest person in the world, as an
example. Last year, Buffett said, he was taxed at 17.7 percent on his
taxable income of more than $46 million. His receptionist was taxed at
about 30 percent.
No he wasn't. Either the reporter is being careless with words or
Buffett is lying. (I'm more likely to believe that the reporter just
doesn't know what he or she is talking about.) The man was taxed at
such a low rate because the vast majority of that $46 million was in
capital gains, not taxable income. Depending on the investment, much
or even most of his tax liability is simply deferred until he sells
his assets. And of course, in either case, capital gains tax rates
are lower than income taxes, as they should be. As for taxable
income, Buffett actually pays himself a tiny salary--almost certainly
_less_ than his secretary, considering the tax rate he or she paid.
Buffett has always lived a very frugal lifestyle and does not need the
income. Last year he paid himself a salary of only $100,000:
http://www.sec.gov/Archives/edgar/data/1067983/000095013407005612/a28...
Considering the fact that he has pledged the majority of his fortune
to charity, he may never pay the bulk of those capital gains taxes,
either. In this country we give preference to capital gains over
income taxes, and a guy like Warren Buffett provides a perfect example
of why we do this. He lives on a very low income, keeps him money
invested in his business, promoting growth. What is the alternative?
Tax all long-term capital gains as short-term income? That would
force Buffett to divest more each year in order to cover his tax
bill.
Forcing people to sell their investments. Sound like a good idea?
Buffett is a unique case because he lives such a frugal lifestyle.
Across the nation, the story is far different. Effective Federal Tax
Rates:
http://www.cbo.gov/ftpdocs/77xx/doc7718/EffectiveTaxRates.pdf
Effect tax rate of all taxes, 2004 (most recent numbers I found in a
quick seach.)
Lowest quintile: 4.5%
Second quintile: 10.0%
Middle quintile: 13.9%
Fourth quintile: 17.2%
Highest quintile: 25.1%
Top 10%: 26.9%
Top 5%: 28.5%
Top 1%: 31.1%
Share of Federal Tax Liabilities, 2004
Lowest quintile: 0.9%
Second quintile: 4.5%
Middle quintile: 9.7%
Fourth quintile: 17.6%
Highest quintile: 67.1%
Top 10%: 52.3%
Top 5%: 41.3%
Top 1%: 25.3%
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